Senate pension plan passes despite resistance

Published in the Sun News: Arcadian
Updated: 03/31/2011 08:12:03PM

Despite unease among even some supporters of the measure, the Senate Budget Committee approved a sweeping pension reform bill that would ask current employees to pay more and lock future employees out of the defined-benefit plan.

The measure passed after Budget Chairman J.D. Alexander, R-Lake Wales, urged committee members to “at least trust me today” and pledged to at least consider several changes to the measure.

But talking to reporters after the meeting, Alexander stressed that changes would have to be considered in the broader context of the Legislature’s efforts to close a $3.75 billion budget shortfall.

“I want to hear the totality of all of the issues … before I’d say what I think could be done,” Alexander said. “The decisions are not made on their own.”

The proposal (SPB 7094) passed 13-8, with two Republicans — Sens. Thad Altman, R-Melbourne, and Sen. Mike Fasano, R-New Port Richey — joining Democrats in voting against the plan. Altman called the plan “a mistake.”

“I hope, in the end run, we do not change this system,” he said. “It’s too important to the people of Florida, because they rely on our public servants.”

Even Republicans who supported the measure voiced caution about some provisions in the bill, a sign of the resistance the plan could run into as it makes its way through the process.

The measure would require Florida Retirement System recipients to contribute 3 percent of their salaries toward their pensions. Employees hired after July 1 who fall out of a classification largely set aside for law enforcement officers would be required to enroll in a defined-contribution plan, like a 401(k). New police, firefighters and other special risk employees could opt to remain in the traditional retirement plan.

The Senate proposal closes the Deferred Retirement Option Program to those not already enrolled and stops current employees from getting cost of living adjustments for salaries earned after July 1. The changes are expected to save the state as much as $1.1 billion, including more than $940 million in general revenue.

Absent from the bill approved Thursday was a provision passed by a previous committee that created contribution tiers for state employees, with the highest-paid state employees devoting a larger portion of their salaries toward retirement. Under that plan, sponsored by Sen. Jeremy Ring, D-Margate, employees making $40,000 or less would not be required to contribute.

Opponents of the bill openly wondered where the provision had gone, and some senators who voted for the bill originally said they would like to see it revived.

“I think that’s very imperative, that we have some opportunity for those in lower-paying jobs to avoid the penalty,” said Sen. Eveyln Lynn, D-Ormond Beach. She added a pointed warning: “If the bill appears on the floor this way, I will not vote for it again.”

Some Republican senators worried that removing the DROP could cause an exodus of state employees eligible for DROP who might instead retire and begin drawing pension benefits.

Democrats were more critical, with Sen. Bill Montford of Tallahassee fearing “a crippling effect, if you will, on the operation of government” and others highlighting the effects on the families of state workers.

“This is dramatic,” said Sen. Arthenia Joyner, D-Tampa. “It’s traumatic. It will create calamity in many households.”

Employees affected by the changes also bashed the plan, including the elimination of DROP.

“It is part of the benefits that we are promised,” said Francesca Rector, a teacher.

But many concentrated their fire on the 3 percent contribution rate for state employees, many of whom have not seen a pay increase in several years.

“To continue to shift the burden onto those who sacrifice to teach in our schools … just seems unfair,” said Andrew Spar, president of the Volusia Teachers Organization.

Law enforcement unions joined educators in pushing back against the changes.

“If our people are forced to give up three percent of their salary,” said Lori Goodwin, a sheriff’s deputy in Santa Rosa County, “they will not be able to afford to pay for a place to live and feed their families.”